Section 5.4: Organizational structures for sustainability

There are many ways in which companies can implement their sustainability strategies, and structure vary across companies. Typically, sustainability crosses levels of management as well as functional groups.

For example, this diagram below show the lines of reporting at working group, executive, and board level:

Source: Lockheed-Martin (2014)

For another example, see how the different functional departments of China Airlines are involved in sustainability.

Source: China Airlines

Each level of management within the firm plays a different role in sustainability management, and addresses specific purposes. A few examples of the types of activities each level of management is involved in is given below:

Level of Management (from top to bottom)

Purpose in Sustainability Strategy

Board of directors & executive committee

Sets company vision

Defines company values and behaviors

Sets long-term strategy and key priorities for sustainability

Department heads

Set business unit/function action plans

Defines actions to be taken by the unit to deliver the strategy

Line management

Set specific action plans for local team

Defines specific role objectives for employees

Monitors and reviews sustainability actions

Sustainability team (can be at various levels)

Puts together annual performance report

Supports business functions

Conducts training

Provides feedback and suggestions to top management for improvements

As well as addressing sustainability through various structural set-ups, companies can also take an issues-based approach to managing sustainability issues. This can be important, in particular, if stakeholders are actively pressuring companies to tackle particular issues such as increasing gender diversity in the company or complying with anti-corruption rules. In such instances, sustainability officers and their departments collaborate closely with other departments:

Source: Sustainability Governance Council (2012)

In a large corporation, sustainability may additionally require structures that coordinate across subsidiaries, regions, functions, and committees, as seen in this example:

Source: Fiat Chrysler Automobiles Group (2014)
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